Economic Impact Report

Grand Rapids Community College creates a significant positive impact on the business communities in Kent and Ottawa counties, where we generate a return on investment to our major stakeholder groups — students, taxpayers, and society. Using a two-pronged approach that involves an economic impact analysis and an investment analysis, this study conducted by Emsi calculates the benefits received by each of these groups. In the analysis year, fiscal year (FY) 2015-16, GRCC served approximately 27,935 students.

Impacts Created by GRCC in Kent County

Impact Population

Added Income

Jobs Supported

Operations Spending Impact

$102.2 million

1,903

Student Spending Impact

$15.3 million

332

Alumni Impact

$296 million

5,992

Total Impact

$413.5 million

8,227

Impact on Business Commmunity

During the analysis year, GRCC and its students added $413.5 million in income to the Kent County economy, approximately equal to 1.0% of the county’s total gross regional product (GRP). By comparison, this impact from the college is slightly larger than the entire Utilities industry in the county. The economic impacts of GRCC break down as follows:

Operations spending impact

GRCC employed 1,785 full-time and part-time employees in FY 2015-16. Payroll amounted to $93.8 million, much of which was spent in Kent County to purchase groceries, clothing, and other household goods and services. The college spent another $35.8 million to support its day-to-day operations.

This spending and its ripple effects created a net impact of approximately $102.2 million in income in FY 2015-16. This is money that wouldn’t exist in the Kent County economy if not for GRCC.

Student spending impact

Around 66% of students attending GRCC originated from Kent County. A number of those students would have left the county if not for GRCC. Many other students relocated to the county. These relocated and retained students spent money on groceries, transportation, rent, and so on at county businesses.

These students’ expenditures during the analysis year and their ripple effects added approximately $15.3 million in income to the Kent County economy — dollars that wouldn’t exist in the county economy without GRCC.

Alumni impact

Over the years, students have studied at GRCC and entered or re-entered the workforce with newly-acquired skills. Today, thousands of these former students are employed in Kent County.

The increased productivity of former students currently employed in the county workforce amounted to a net impact of $296 million in FY 2015-16 alone.

Return on Investment to Students, Taxpayers, and Society

For every $1 spent by ...

Students

Taxpayers

Society

$4.70
Gained in lifetime earnings.

$4.00
Gained in added taxes and public sector savings.

$12.40
Gained in added state revenue and social savings.

Student perspective

GRCC's FY 2015-16 students paid a total present value of $51.8 million to cover the cost of tuition, fees, supplies, and interest on student loans. They also gave up $66.7 million in money that they would have earned had they been working instead of learning.

In return for their investment, students will receive a present value of $561.9 million in increased earnings over their working lives. This translates to a return of $4.70 for every $1 that students invest in their education. The average annual rate of return for students is 16.4%.

Student Rate of Return

Average Annual Return for GRCC Students: 16.4%

Stock Market 30-year Average Annual Return*: 10.1%

Interest Earned on Savings Account (National Rate Cap)**: 0.8%

*Forbes' S&P 500, 1987-2016.
**FDIC.gov, 7-2017.

Taxpayer perspective

In FY 2015-16, state and local taxpayers in Michigan paid $64.3 million to support GRCC. In return, they will receive a present value of $240.3 million in added tax revenue from student’s higher lifetime earnings and another $14.6 million in savings due to students’ reduced demand for government-funded services in Michigan.

Dividing benefits to taxpayers by their costs yields a 4.0 benefit-cost ratio, meaning every $1 in taxpayer costs returns $4.00 in benefits. The average annual rate of return for taxpayers is 10.7%.

Social perspective

The economic base in Michigan will grow by $2.6 billion over the course of the students’ working lives due to their increased earnings and productivity. Society will also benefit from $54.6 million in present value social savings related to reduced crime, lower unemployment, and increased health and well-being across the state.

For every dollar that students and taxpayers spent on GRCC FY 2015-16 educations, society will receive a cumulative present value of $12.40 in benefits.

Impacts Created by GRCC in Ottawa County

Impact Population

Added Income

Jobs Supported

Operations Spending Impact

$5.3 million

108

Student Spending Impact

$2.7 million

48

Alumni Impact

$26.2 million

450

Total Impact

$34.2 million

606

Impact on Business Community

During the analysis year, GRCC and its students added $34.2 million in income to the Ottawa County economy, approximately equal to 0.3% of the county’s total gross regional product (GRP). By comparison, this impact from the college is nearly as large as the entire Arts, Entertainment, & Recreation industry in the county. The economic impacts of GRCC break down as follows:

Operations spending impact

GRCC employed 1,785 full-time and part-time employees in FY 2015-16. Payroll amounted to $93.8 million, a portion of which was spent in Ottawa County to purchase groceries, clothing, and other household goods and services. The college spent another $35.8 million to support its day-to-day operations. Some of this non-payroll spending occurred in Ottawa County as well.

This spending and its ripple effects created a net impact of approximately $5.3 million in income in FY 2015-16. This is money that wouldn’t exist in the Ottawa County economy if not for GRCC.

Student spending impact

Around 19% of students attending GRCC originated from Ottawa County. A number of those students would have left the county if not for GRCC. Many other students relocated to the county. These relocated and retained students
spent money on groceries, transportation, rent, and so on at county businesses.

These students’ expenditures during the analysis year and their ripple effects added approximately $2.7 million in income to the Ottawa County economy — dollars that wouldn't exist in the county economy without GRCC.

Alumni impact

Over the years, students have studied at GRCC and entered or re-entered the workforce with newly-acquired skills. Today, thousands of these former students are employed in Ottawa County.

The increased productivity of former students currently employed in the county workforce amounted to a net impact of $26.2 million in FY 2015-16 alone.

Return on Investment to Students, Taxpayers, and Society

For every $1 spent by ...

Students

Taxpayers

Society

$4.70
Gained in lifetime earnings.

$4.00
Gained in added taxes and public sector savings.

$12.40
Gained in added state revenue and social savings.

Student perspective

GRCC’s FY 2015-16 students paid a total present value of $51.8 million to cover the cost of tuition, fees, supplies, and interest on student loans. They also gave up $66.7 million in money that they would have earned had they been working instead of learning.

In return for their investment, students will receive a present value of $561.9 million in increased earnings over their working lives. This translates to a return of $4.70 for every $1 that students invest in their education. The average annual rate of return for students is 16.4%.

Student Rate of Return

Average Annual Return for GRCC Students: 16.4%

Stock Market 30-year Average Annual Return*: 10.1%

Interest Earned on Savings Account (National Rate Cap)**: 0.8%

*Forbes' S&P 500, 1987-2016.
**FDIC.gov, 7-2017.

Taxpayer perspective

In FY 2015-16, state and local taxpayers in Michigan paid $64.3 million to support GRCC. In return, they will receive a present value of $240.3 million in added tax revenue from student’s higher lifetime earnings and another $14.6 million in savings due to students’ reduced demand for government-funded services in Michigan.

Dividing benefits to taxpayers by their costs yields a 4.0 benefit-cost ratio, meaning every $1 in taxpayer costs returns $4.00 in benefits. The average annual rate of return for taxpayers is 10.7%.

Social perspective

The economic base in Michigan will grow by $2.6 billion over the course of the students’ working lives due to their increased earnings and productivity. Society will also benefit from $54.6 million in present value social savings related to reduced crime, lower unemployment, and increased health and well-being across the state.

For every dollar that students and taxpayers spent on GRCC FY 2015-16 educations, society will receive a cumulative present value of $12.40 in benefits.